Vietnamese Prime Minister Nguyen Tan Dung has approved a plan to partially privatize one of the country's biggest steel manufacturers, Vietnam Steel Corp (VNSteel), the government said on Tuesday.

Vietnam has been selling off pieces of state-owned enterprises for the past two decades, dubbing the process "equitization" rather than privatization, and VNSteel is one of a handful of big state firms some investors had expected to be privatized soon.

In the past four years the privatization process has virtually ground to a halt as market conditions in Vietnam soured when the economy overheated and the global financial crisis hit. The government had pledged to step it up again this year.

As in most cases, the government will keep a controlling stake. It allowed VNSteel to sell a 9.7 percent stake at an initial public offering, while Hanoi will still own more than 65 percent in longer term, the government said on its news website (baodientu.chinhphu.vn).

The approval gave no details on the timing or possibility of foreign participation.

Vietnam produced about 1.33 million tons of steel in the first quarter this year, up 10.2 percent on the same quarter last year, state media quoted the Vietnamese Ministry of Industry and Trade as saying. VNSteel produced 280,000 tons of steel during the period, up 30 percent.

State fuel distributor Petrolimex has said it plans to go public in 2011 by selling a 7 percent stake, and flag carrier Vietnam Airlines wants to speed up its privatization plans this year.